Sep 21, 2016
Clothing retailer Bonmarche's shares dive after profit warning
Sep 21, 2016
British women's clothing retailer Bonmarche warned on profit on Wednesday as unseasonably hot September weather hit demand, hammering its stock price.
Shares in Bonmarche, which predominantly serves the 50 plus women's clothing market, fell up to 31 percent, taking its decline so far this year to more than 50 percent.
Analysts said the warning could have implications for the bigger players in Britain's clothing market, who have already endured unhelpful summer weather patterns, with June a washout.
Bonmarche said trading in September so far had been "extremely poor", largely as a consequence of hot weather which has not favoured sales of its new autumn ranges.
"The hot September has prevented us from gaining a representative measure of the strength of the autumn ranges, and our perception is that the clothing market generally has become more challenging," said the firm.
It forecast an 8 percent decline in underlying store sales for the second quarter and lowered its second-half profit expectations.
Bonmarche forecast a pretax profit for 2016-17 of 5-7 million pounds. Analysts at Investec were previously forecasting 12.5 million pounds.
"Attention now turns to whether Marks & Spencer and Debenhams will have to bring forward their planned updates on current trading," said independent retail analyst Nick Bubb.
Both M&S and Debenhams declined to comment.
M&S is due to publish half-year results on Nov. 8, while Debenhams is due to report full-year results on Oct. 27.
M&S' new boss Steve Rowe has pledged to turn around M&S's struggling clothing business by improving ranges and availability, cutting prices and offering fewer promotions.
However, his plan, outlined in May, came with a warning of a short-term dent to sales and profit and in July the 132-year-old group reported its worst quarterly clothing sales performance for a decade.
Shares in M&S, down 28 percent so far this year, were up 0.4 percent at 0932 GMT. Debenhams shares, down 23 percent in 2016, were flat.
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